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Commentary: The 2016 Presidential Election: Change in the Air?

The 2016 Presidential election is over. Donald Trump is the President-Elect of the United States of America after collecting more than 59 million votes and winning more than 26 states.  The electorate was angry and sent a message to the Washington, DC, Beltway that “you had better start paying attention to the people and start doing the work that you were sent to do; and we are sending Trump to make sure you do it.” At the end of a long night Nov. 8, many questions surrounded the nation: Will Trump be centrist or an extremist, as he campaigned? What type of people will he surround himself with as part of his cabinet? Will we survive a Republican-led government for two years?

We’ll have our answers soon enough. For those of us in the wound care industry, what does this mean for medicine, wound care, and overall insurance regulation? Does the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) survive? How does any of this play out? For starters, the need for everyone to relax is the first order of business. We need to believe the transfer of power from President Obama to Trump will be dignified and orderly. Wall Street and Main Street do not like extremes. The need for the new administration to understand the economics of healthcare delivery is vitally important over the next several weeks. In order to understand all of this, we need to remember a couple things that probably will not change:

1) MACRA is here to stay. The Centers for Medicare & Medicaid Services has determined this is the payment model going forward, even if it’s not the ultimate endgame. For now, this will be the way hospitals, clinics, and physicians are remunerated for services.

2) The Affordable Care Act (ACA) will not be going away. There are legislative provisions in the law that cannot be “repealed” without consequences.  As every American remembers from middle-school civics, the president cannot unilaterally repeal a law.  Under Article I of the Constitution, a bill must be passed by both the House and Senate and signed by the president to become law. This happened with the ACA, and it remains the “law of the land” until it’s repealed through this process. Under the Senate rules, a bill must pass by a three-fifths majority if it is filibustered, and an ACA repeal certainly would be. At this point, since the Republicans did not pick up a 60-vote majority in the Senate, any repeal as such seems off the table.

3) This is also true for repeal and replace.  There are aspects and coverage of some adult children and coverage of preexisting conditions in the individual market for people who lose insurance coverage that is very favorable to the public. Most people favor equalizing the tax treatment of individual and employer-based coverage. The first two of these initiatives would require full congressional action. The third could be passed, however, through budget reconciliation.

4) Loosening rules on insurers may decrease premium growth in the long term, but at this point there is little chance insurers would actually decrease premiums regardless of whether the ACA was repealed or not. In fact, the loss of millions of ACA customers might send the market into chaos, leading to higher premiums in the short term.  

5) The estimated cost of repealing the law could be as much as $6.2 trillion (over the next 75 years), according to a 2013 report by the Government Accountability Office. A June 2015 report from the Congressional Budget Office showed a $137 billion net increase to the deficit over the next decade, if the ACA is repealed (a little less jarring and more exact short-term effect on the deficit), plus up to 24 million being uninsured by 2024.

The reason repealing the law adds to the deficit rather than reducing it is because the bulk of the law actually curbs healthcare spending and takes in revenue, while only a small part contributes to spending. Of course, a full repeal means doing away with all reforms, not just subsidy spending. Specifically, Medicare reforms do a lot to bring down long-term Medicare spending and, in general, healthcare spending was one of the major driving forces behind publicly held debt and an increasing deficit prior to the passing of the ACA. So what does healthcare look like under President Trump?

  • Kids staying on their plan until 26 will likely go away.
  • The mandate to cover preexisting conditions will likely go away. However, there will also likely be an exception for those who stay on a plan. Essentially, special enrollment will stay, but the mandate and open enrollment won’t.
  • The fee for not having coverage will almost certainly be eliminated. It’s the main thing people don’t like about the ACA.
  • Insurers will almost certainly be able to sell across state lines. It has long been on the GOP wish list.
  • Drug prices may be negotiated for Medicare.
  • Drug regulation may be passed to control costs. Trump has expressed a desire to go after drug companies before.
  • Medicaid will likely stay expanded, but may get turned into a “block grant” program. This would mean states get a lump payment and a general guideline for Medicaid, rather than strict rules on spending. This is a longtime GOP favorite, so it is likely.
  • One cool thing is that Trump said he would allow taxpayers to deduct health insurance premium costs on their tax returns. Today, premium costs can’t be deducted.
  • On the flipside, it’s likely cost assistance would be repealed as it is now. However, we have had healthcare tax credits in the past pre-ACA, so there may be another healthcare tax credit in the future (past GOP plans have included one). 
  • Health savings accounts (HSAs) will almost certainly be expanded. Trump and the GOP have mused in the past about funding HSAs rather than providing assistance for out-of-pocket costs.

Overall, things may change, or things may stay the same. The big picture here is that this was a “change election” and the voters have spoken.

Commentary
Eric J. Lullove, DPM, CWS, FACCWS
PDF
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